The Supply and Demand Side is under Pressure, and the Expectation of Improvement in Carbon Black is Limited（April 3, 2025）

In March, the price of carbon black market fluctuated and declined, affected by the shock and decline of the raw material market, the keep of high price of carbon black market was difficult at the beginning of the month, and then followed by the decline of the raw material market, and the downstream tire market is bearish on the market, and the receipt of goods is mainly based on small orders. Since the middle of the month, the enthusiasm of production of the carbon black market has declined to reduce inventory, and the atmosphere of negotiation in the market is weak, and the carbon black market has continued to bottom out in the month.

Supply side: The rise in coal tar is gradually weak, and the support on the cost side is limited

In March, the domestic high-temperature coal tar market continued to rise, and the tight supply and demand situation in the market was significantly eased, and the increase was significantly narrowed. On the supply side, although the price of coke was only lowered once in March, the profit side of coke enterprises did not improve significantly, so the operating rate continued to decline compared with February, and the supply of high-temperature coal tar decreased. However, from the demand side, due to the continuous decline of deep-processed products, some products have inverted with the price of raw materials, resulting in the continuous increase in the loss of deep-processing enterprises, so some enterprises have advanced the spring inspection, and the operating rate has dropped sharply, and the carbon black enterprises with the serious unsalable carbon black, the inventory pressure has increased, so the yield has dropped significantly in the second half of the month, so on the whole, the demand for coal tar from deep processing and carbon black enterprises has dropped significantly, alleviating the tight situation of coal tar, so the coal tar market has gradually weakened.

Demand side: the actual sale is less than expected, and the yield is weak

The operating rate of China's semi-steel tire sample was 78.54% in March, +16.19 percentage points month-on-month and -2.12 percentage points year-on-year. In March, most semi-steel tire enterprises maintained a high yield level to meet the demand for concentrated shipments after the holiday. Based on the overall low base during the "Spring Festival" holiday in February, the yield of tire enterprises increased significantly in March. Due to the reduction of foreign trade orders of semi-steel tire enterprises, the overall demand for domestic sales was weak, and the release of new production capacity was superimposed, the pressure on production and sales of enterprises increased, and the overall operating rate was not as high as the same period last year. The operating rate of China's all-steel tires in March was 68.71%, +15.93 percentage points month-on-month and -3.61 percentage points year-on-year. In March, most all-steel tire companies maintained a relatively high yield level to meet the demand for post-holiday orders. However, the overall sales volume was not as high as the same period in previous years, and the performance of foreign trade of various enterprises was different, so the overall yield was dragged down.

Market outlook: the contradiction between supply and demand increases, and the price of carbon black is expected to be limited

In early April, the coal tar market will be supported by rigid demand, the market price will rise to a certain extent, driven by the cost side, so the carbon black market will have a high price performance. But the terminal tire market demand will decline, and the pressure of new orders will be greater. Overall, market prices are expected to decline throughout April.